Through the QIZs, Egyptian companies are able to export to the United States without having to pay taxes on importing. The catch, however, is that a certain percentage of the product must have either gone through Israel or carrying Israeli products…
“Eissa added, “Egypt can import raw materials from other countries that are not members in QIZ, while the exporter country will not enjoy the advantages that the agreement provides to Egypt.”The minister said that the government is attempting to reduce the amount of Israeli compenents in the products exported. It currently is slightly over 10 percent required..
“Jordan, which also has a QIZ agreement with the US, has already reduced the Israeli component required for shipping to the US to 8.5 percent. Eissa’s sentiments were echoed by Galal al-Zorba, the chairman of the Industrial Union, who said that ending the QIZ “would negatively affect Egypt’s economy and destroy Egyptian products’ ability to compete in different industries.”He continued to say that if the government cancels the QIZ, “it should sign a free-trade agreement with the US to replace it.”.